When one goes UP the other goes DOWN SPY vs VXX


The markets had finally bounced off a @10% correction, the V-shaped bull run was ready to continue the talking heads expounded. Not that BIG GAME subscribers cared. Dale tweeted on Tuesday February 27th. The MACD divergence on the VXX to the upside and SPY to the downside on the hourly charts were very evident as you can see below. Weakness remains in the SPY, the MACD  shows prices need to be lower.


The VXX shows clearly that volatility should be higher. As we know increased volatility most often accompanies sharp moves to the downside in the SPY.

We didn’t have to wait for long for the move to happen. the SPY fell from the high near 279 to the 274 area. Out of the money options made huge gains over a trading day and change. The 30 minute chart below on SPY shows the decline.


Towards the middle of the trading day on the 28th a small rally was occurring on the SPY. When the MACD turned back down on the 30 minute chart, we knew the interruption was over. We used patience and  waited or this 30 minute MACD to turn back down to confirm the continuation of the still present downside divergence on the higher time frame (the hourly) on SPY.